Helping indigenous communities though procurement

The idea

One Sentence description: Aa self-funded agency that brings indigenous owned organisations into contact with non-indigenous enterprises that want to increase the number of indigenous owned suppliers.

Addressing topic: Social Procurement Challenge

Team members: Stuart Orr, Cameron Peel, Jimmy Singh, Nathan Noblet

Provide an overview of your solution and how it solves the problem along with a
short description of your inspiration behind the idea:

We propose a self-funded agency (three full-time staff plus volunteers) that mentors indigenous owned organisations (businesses that are owned by indigenous groups) so that they can become involved in the Australian Government's Indigenous Procurement Policy. Many indigenous owned organisations are potentially able to take advantage of this policy, however, are not ready to work with many sectors of the commercial and not-for-profit sector. It will also facilitate contact between non-indigenous enterprises and indigenous-owned suppliers in Victoria which is currently not supported by any agency of this type. The indigenous owned organisations will be identified through the agency’s networks. The initial contact networks will be established with the assistance of Deakin University’s Institute for Koorie Education. This institute will also be a partner in the initiative.

This initiative will provide an economic benefit to the suppliers by increasing their business activities and economic sustainability. It will provide a social corporate responsibility benefit to the non-indigenous enterprise, by assisting them to include more indigenous suppliers in their supply chain.

As the brokers in this process, the self-funded agency will charge a small levy to each commercial enterprise who connects through its services which enables it to pay the salaries of its 3 staff. Volunteer workers and placement students will add to the labour force. As its first initiative, the agency will apply for government grants to cover the cost of office equipment, domain name and website costs. The Deakin University Department of Information Systems and Business Analytics will assist with the construction of the website.

Describe your solution in detail, providing a high-level business plan addressing how you would
implement your solution:

We aim to provide mentoring services to enable indigenous organisations to improve their operations to the point where they can become suppliers to other organisations and facilitate the connections with potential customer organisations. This will provide the downstream participants with a competitive advantage through offering socially responsible goods with a uniquely Australian identity.

The agency will assist the indigenous organisations to deal with a number of barriers, such as accounting record-keeping, registering to use the GS1 system, having products assigned with a Global Trade Item Number (GTIN) and ensuring that the correct fulfilment models are being used to ensure efficient use of their resources.

Indirectly, other indigenous organisations in the supply chain will also benefit, through increased demand for transportation of goods sourced through the scheme, resulting in additional employment opportunities.

While the organisation will require seed-funding in the establishment stages, it is intended that the organisation is funded through a levy to be charged to downstream participants in the supply chain.

Strategies

During the next 12-months indigenous owned organisations, predominantly from the Northern Territory will have to be contacted to get their support to establish a network of suppliers. The network will thus allow non-indigenous organisations to get into contact with suppliers to help stimulate growth in indigenous communities.

The Agency is self-funded, therefore applying for government grants to increase capital to pay for utilities and the 3 full time workers. Furthermore, government grants will help give the organisation more legitimacy and encourage involvement. One such grant is the Indigenous Advancement Strategy grant. It provides financial assistance for organisation who promote Indigenous Australians and businesses.

The agency will be promoted through initial launch and a series of promotions over the first two years of its operations. Suppliers, partners, government members and other stakeholders will have the opportunity to meet and discuss future goals and collaborations. A guest speaker will talk about the importance of the Agency and how it will benefit the Australian economy and improve the social and ethical responsibility of the non-indigenous companies involved.

Action Plan

According to ASICthe first in establishing an Agency is to register the business name registration online. It will cost $90 for 3 years to for an ACN/ABN.

Melbourne will be the location of the head office space. Estimated at about $300-$700/week rent in East Hawthorn. Securing an office space will enable us to acquire equipment needed for the agency like desks, computers, filing cabinets and stationary.

During this time, the agency will partner with the Deakin University Department of Information Systems and Business Analytics to help set up a website and a format database to organise the Indigenous Suppliers.

The team will provide the resource equivalent to three full time workers for the first two years. As well as using Deakin University graduates to identify potential volunteers for their experience.

Contacting indigenous suppliers to be involved with the agency. Gaining support will require a report showing the success of similar organisations that focus on indigenous organisations, and ensuring that there will be a return on investment after they pay the small levy. A majority of the suppliers will be from the Northern Territory to help stimulate economic growth and sustainability.

Becoming a member of state Chambers of Commerce will allow commercial organisations and communities to get in contact with companies needing the Agency to locate indigenous suppliers. The Victorian Chamber of Commerce has over 15,000 members. The Small Business Taskforceand Policy Areas and Expertise will be the most suitable departments to contact. For the Chamber of Commerce Northern territory, the Employment Education and training and Economic Policy. Also, for the Australian Chamber of Commerce and Industries contacting policy topics of employment and small businesses.

Outline the budget required to achieve the ambition of your idea:

The business model is to be self-funded after two years on the basis of levies provided for the agency's service. The agency will apply for government grants in order to develop its capabilities and purchase equipment. It will also seek input from volunteer staff to augment its resources. Subsequently, seeding funding will be required to cover the first two years. The items below represent the operating costs. The team will volunteer their services for the first two years to get the agency operating. Once a revenue stream is established, they will begin to draw modest salaries. If successful in the competition, the prize will be used for the seed funding.

Challenge Prize

Team and Partners

Team contribution

in kind

Salaries (3 staff x 2 years)

$50,000

Mentors (2 mentors @ $100/hr x 200 hrs over 2 years)

$20,000

Equipment

$5,000

Volunteer Coordinator (2 years)

$30,000

Administration (2 years)

$2,500

Website development

$300

Domain name registration

$50

Travel costs (local)

$3,000

$2,000

Promotion catering (4 events per year x 2 years)

$4,000

Office rental ($230/week x 2 years)

$18,000

$4,360

Total

$25,000

$8,860

$105,300

Partnerships are critical for a stronger idea and delivering a solution.
Who are the key stakeholders within your idea? Is your solution the result of a collaborative approach?
If not, are you looking to bring other partners along:

The key stakeholders are the indigenous communities of Australia. Deakin’s Institute for Koorie Education is very well connected to the indigenous community across Australia and particularly in Victoria. This organisation will enable us to interface with the stakeholders and provide opportunities for explaining our purpose and function. Commercial associations, such as the Australian Institute of Management and the Employers Chambers of Commerce and Industry in each state will be contacted and introduced to the business. They will be asked to promote the business as a corporate social responsibility initiative to their members.

To strengthen the likelihood of success, a broad foundation of evidence is critical.
What’s the evidence base that points towards your solution being a success?
Is your solution addressing an unmet gap in the market:

SupplyNation provides a limited and commercially oriented service that does not function Victoria. It deals with indigenous organisations which are ready to trade with commercial organisations. Based in Sydney, Perth and Brisbane SupplyNation aims to promote integration and business-to-business transactions. The principal gap the Agency will be filling is in Victoria (based on location). This Agency will focus on companies based in the Northern Territory and aims to primarily connect members in Victoria. And aims to provide economic benefits and sustainability in indigenous communities.

Who are the key beneficiaries of your solution:

As described above, the key beneficiaries for the solution are indigenous owned enterprises. Bringing these organisations into partnerships with commercial and non-commercial enterprises wishing to increase their corporate social responsibility well provides these organisations with increased revenue sources, greater stability of income and longer term economic sustainability.

Do you have funding partners interested in your idea:

The project fits strongly with the Australian government’s indigenous peoples initiatives program. As noted in the business plan, whilst the networks with the indigenous communities are being developed, applications for support from these government programs will also be developed and submitted.The project will be supported by the mentors at Deakin University and the funding bodies that the agency approaches.

Describe your most successful experience executing a solution to a problem:

As a student initiative, the team has limited commercial experience. It will however, have the support of a number of mentors from Deakin University with significant experience in both commercial enterprises and the indigenous community. The team also are studying supply chain management and are just finishing their degree and are enthusiastic about putting their knowledge of Supply chain Management into practice, with the support of their mentor group.

Idea Activity

Hi Jo, Supply Nation provides of list of Indigenous businesses that members can use to find suppliers of goods and services that are owned by indigenous people and groups. It mostly deals with larger companies and this is why there is a lot of government support. The main difference between our service and Supply Nation is that we will be drawing on the resources of Deakin University's Institute of Koorie education to help identify, mentor and develop the capability of the indigenous organisations that we introduce to nonindigenous companies as suppliers. It is our contention that indigenous organisations may not always be ready for the communication, cultural and operational differences that they will experience from this type of partnering process without appropriate mentoring. This will be particularly significant if the nonindigenous company that they are supplying is a large company. There is some significant literature supports this concern for indigenous companies as suppliers in other countries.

This service will complement Supply Nation's activities by helping to develop robust indigenous suppliers for nonindigenous companies and organisations across Australia. As Supply Nation does not currently work directly in Victoria, the Victoria location for our service will also serve to provide further local support. Please let us know if you have any other questions; we would be very happy to discuss this interesting aspect further.

Hi Stuart, Cameron, Nathan and Jimmy. Thanks for sharing your idea. Indigenous businesses are such important stakeholders in 'Good Procurement' in Australia so it's great that this is your specific focus. Good luck!